Beating Brokehttp://www.beatingbroke.com
Personal Finance from the Broke PerspectiveWed, 21 Feb 2018 01:46:17 +0000en-UShourly1https://wordpress.org/?v=4.9.4BeatingBrokehttps://feedburner.google.comSimple Ways to Save Even When Money Is Tighthttp://www.beatingbroke.com/simple-ways-to-save-even-when-money-is-tight/
http://www.beatingbroke.com/simple-ways-to-save-even-when-money-is-tight/#respondTue, 20 Feb 2018 14:26:59 +0000http://www.beatingbroke.com/?p=17574For the 15 years my husband and I have been married, we’ve always shared just one car. Actually, most of the time I’ve been the one with the car—first because I had to drive to work while he could easily take the train, and, once I became a stay-at-home mom, because I usually had the kids that I needed to transport while he could commute by public transportation.

While he’s been a good sport about this situation, the time has come to finally buy another car that he can use.

The problem? We don’t want to take out a car loan because doing so would create a serious strain on our budget. We want to pay cash instead.

But how do you save money for a car when you feel like there’s absolutely NO wiggle room in your budget? Here are the strategies we’re using.

Save Cash Back from Credit Cards

Our credit card regularly gives us cash back. For the first three months of 2016, we’ve earned just shy of $150 in cash back. If we continue at this pace, we’ll have an extra $600 in cash back thanks to using, and paying off, our credit card each month for as many purchases as we can.

Save Whenever You Receive Discounts on Regular Expenses

This is my favorite way to save because there are so many opportunities to save this way!

For instance, at Christmas, we received a postcard from our car repair shop offering 10% off our next car repair. I held onto that, and just last week we had a $284 car repair. We saved $28 thanks to the postcard, and that money went right in our car fund.

We took a vacation recently and stopped by Denny’s on our last day when we had eaten up all the food we had brought with us in the cooler. Our total was $39, but for some reason, the cashier decided to give us a $6 discount. I put that money right in our car fund.

Our grocery store gives fuel rewards points for shopping. For every $100 spent in groceries, you get 10 cents off your next gallon of gas. If you buy a gift card, your reward points are for double that amount. I send any of those savings to our car fund. Just today I put 19 gallons in my tank, and I got 20 cents off per gallon. I put that $3.80 into our car fund.

Save Change or a Specific Bill

I don’t use this strategy anymore because we typically use credit cards for our purchases, but when I was using cash a lot, I never spent the change and earmarked it all for a specific fund. One time, I went several months saving all of the $5 bills I got and used them to pay down debt.

To be sure, none of these savings strategies is growing our car fund at an impressive rate. However, we ARE saving something using ways we save in our everyday lives. We’re consciously, physically setting aside our savings, which is a great way to save when your budget is tight and you feel like you have no wiggle room.

Do you save like this? If so, what are your favorite strategies?

]]>http://www.beatingbroke.com/simple-ways-to-save-even-when-money-is-tight/feed/0How to Give Your Credit Score a Makeover in 90 Days or Lesshttp://www.beatingbroke.com/how-to-give-your-credit-score-a-makeover-in-90-days-or-less/
http://www.beatingbroke.com/how-to-give-your-credit-score-a-makeover-in-90-days-or-less/#respondSun, 18 Feb 2018 02:18:35 +0000http://www.beatingbroke.com/?p=18420If you want to get ahead financially, good credit can be a huge help. Lenders may be more inclined to give you a car loan or a home loan at a great rate when you’ve got a strong financial history. But how do you build better credit? And how long does it take?

Surprisingly, not as long as you might think. It all comes down to planning. If you’re wondering how to improve your credit score — and do it quickly — these tips can help.

Know your score

First things first, get your free credit score so you know where you’re starting from and how many points you’ll have to make up to reach your target score. For example, if your score is 650 and you want to raise it to 700, that’s a 50-point gap you’ve got to cover.

Check your score but also check your credit report. Your credit report includes all the information that’s used to generate your score, including your payment history, how much of your available credit you’re using, the age of your credit accounts, the types of credit you’re using and how often you apply for new credit.

Two things, your payment history and credit usage, have the biggest impact on your score. If you have late payments on your credit or high balances on your credit cards, those are two trouble spots you’ll need to work on right away if you want to fix your credit fast.

Target one debt

Credit usage just means how much of your available credit you’re using. The closer you are to your credit limits on your credit limits, the worse that is for your score. Paying one of your cards off, or paying down a significant chunk of what you owe, could trigger a quick credit score turnaround.

Pick the card with the balance that’s closest to your credit limit. Or, you can pick a card that has the lowest balance overall if you think you can pay it off in just a few months. The goal is to widen the gap between what you owe and your total credit line as much as possible.

There is an alternative way to do this. You could ask your credit card company to raise your credit limit, or you could open up a brand-new credit card account. Remember, though, that applying for new credit can ding your score by a few points.

Get caught up on past due payments

Paying your bills on time is the most important thing you can do to help your credit score. If you’ve fallen behind on any of your credit cards, loans or medical bills, getting paid up should be at the top of your to-do list. Once you’ve done that, focus on paying your bills on time each month going forward.

Automating your payments from your bank account is an easy way to do this. You could also set up payment alerts to keep track. Either way, the fewer late or missed payments on your credit, the better for your credit score in the long run.

]]>http://www.beatingbroke.com/how-to-give-your-credit-score-a-makeover-in-90-days-or-less/feed/0A Complete Guide to Forex Tradinghttp://www.beatingbroke.com/a-complete-guide-to-forex-trading/
http://www.beatingbroke.com/a-complete-guide-to-forex-trading/#respondWed, 07 Feb 2018 03:53:00 +0000http://www.beatingbroke.com/?p=18418“If you are a newbie to the trading world, it is a good idea to make use of a demo account to get a feel of what trading real markets with real currency will be like,” confirms an expert trading consultant at Olsson Capital. This helps you to build experience and gears you for what trading feels like.

It does not matter if it is big or small; it still counts

One very important thing to remember is to know what the trading market as a whole looks like. The trading market is built up of traders that have millions of dollars invested as well as the part-time trader who only has a few dollars. This, in its entirety, makes the trading market what it is.

Long-term and short-term trades

If you are looking to make a few trades and want to make a profit from it, it is considered that you do short-term trading. If you keep your trades open for weeks at a time, it is considered long-term trading and the risk regarding these trades become higher as the days go by. By making use of long-term trading rather than short-term trading, you are making your trades more of an investment rather than a profit-making option.

Keeping it simple

If you trade Forex or other commodities, you might become overwhelmed by the number of tools at your disposal to execute a profitable trade. You need to take into consideration that making use of all the tools available to you will not help you make a profit. Instead, learn how to use a few of the tools very well as you will see that the trading game becomes less stressful with fewer tools.

Learn the technical analysis lingo

While trading, you need to learn about the Forex market charts, graphs and other elements of understanding a trade. Technical analysis includes knowing and being able to read trend lines as well as support and resistance lines. You also need to stay up to date with things happening in the world that might have an effect on the Forex market price.

Don’t trade with what you think but with what you see

If the market is volatile, you might think that you are going to make a profit if you ride along with the trend. The fact of the matter is that anything can happen at any given time. What you think might happen will not always happen. On the other hand, what you see when looking at market charts is the best way to indicate what a specific market trend is. Having said that, you need to trade with the trend as you can see what it is, rather than trading by what you think will happen.

Trading is regulated by the government

If you decide to become a market trader, you need to ensure you are legally protected. As you are trading with international currencies and have a stake of your own investments in these currencies, it is vital that you are protected. If you are looking for a secure trading platform for executing trades, you need to take the following into consideration:

Make sure your broker does not use the money you have invested for anything else. That way, when you want to withdraw your money, it is available within a few minutes.

Should your broker become bankrupt, you need to make sure what the amount is that will be issued over to you as a return on your investment.

If you have a Forex query that is not solved within a certain period of time, you need to ensure that the query will be forwarded onto a customer support agent that would be able to assist you.

You need to know that the process of trading is a long but fruitful one. One can never develop a guide that will give you profitable traders every single time as trading is a learning process and always will be. All you need to do is investigate, read, listen, learn and know when it is time to make the trade and when you should wait for the next opportunity to come along.

If you’re like me (and you likely are if you’re reading this post), you’ve always got a side hustle or two running at once. You’re always looking for something to augment your income and help you pay off debt (or pay for that extra vacation). This blog is one of mine. I’ve also got a few things that I’ve got posted on my Etsy store. Nearly everything that I do is online. I don’t have to carry inventory, or attend swap meets, or anything of the like. But that’s not the case for all of you.

photo credit: SumUp

For some of you, there’s a very good chance that you’ve got to be mobile, and you’ve got to accept payments wherever your customer meets you. In the past, that has meant carrying a bit of cash around to make change with, and when the day has been good, carrying even more cash back with you. That can be dangerous. The other issue you will likely run into is that you’re likely to have a few customers like me who rarely carry more than a few dollars of cash, and want to pay for their purchase with their debit or credit card.

If you are one of those who makes sales while on the go, you need some way to process credit or debit transactions. Not only is it safer than carrying around a bunch of cash, but it will save you a heck of a lot of time and energy when doing your accounting at the end of the day. There are plenty of companies that offer these kinds of services. One that offers up both a super portable card reader and a portable cash register, is a company called SumUp. Unlike some of their competitors, their device connects to an app on your phone (iOS or Android) via bluetooth, getting rid of the dongle approach that can easily break. And there’s a couple of ways that you can accept cards through the device.

Magstripe transactions

This is the old fashioned way of taking a credit transaction. The magnetic strip on the back of the cards holds all the card data. A quick swipe, and the reader reads that data, and processes the transaction. Easy peasy. Most of us are super used to transactions that work this way.

EMV chip transactions

Magstripe is the tried and true transaction process. But it’s also the one that makes it super easy for fraudsters to copy the data from the stripe and use it to perform fraudulent transactions. The EMV chip is the new technology that is meant to help prevent all of that. The chip is embedded in the new cards, and needs to be inserted into the reader. It has to be physically present to work, and it’s not as easily copied. It’s more secure, and it works well.

SumUp’s fees and limits match or best their competition, and their design is pretty cool too. Watch this video to see what it’s all about.

At the end of the day, if you’ve got a side hustle that has to be mobile, you need some sort of mobile card terminal. There are several options out there, and SumUp is just one of those. As the hustler, I would expect you to do your due diligence and make a decision based on what your business needs are. The only thing I can really tell you is that if you don’t have a way to process these sorts of transactions, you’re leaving money on the proverbial table. Don’t do that.

]]>http://www.beatingbroke.com/taking-your-side-hustle-mobile/feed/0Frugal Sack Lunch Ideas for Kidshttp://www.beatingbroke.com/frugal-sack-lunch-ideas-for-kids/
http://www.beatingbroke.com/frugal-sack-lunch-ideas-for-kids/#commentsMon, 30 Oct 2017 02:30:51 +0000http://www.beatingbroke.com/?p=18354When we send our kids to school, we want them to receive the best education. Having a healthy lunch to eat is a big part of that. But, if you choose to buy convenience packages of snacks and desserts as well as lunch meat, sack lunches can quickly become an expensive endeavor over the course of a year. Especially if you’ve got a hungry teenager. If you’re looking to curb costs, consider some of these frugal sack lunch ideas. Mix and match to make tasty, healthy, low cost lunches for your kids all day long.

Protein

Hard boiled egg(s)

Peanut butter (Use it on celery sticks, as a dip for veggies, or on a sandwich.)

Fruit

Apple slices (Slice your own apples and dip them in a bowl with water and a bit of salt. They won’t brown and you’ll save a lot of money compared to buying already sliced apples.)

Clementines (These can be put in whole or peeled and separated for younger kids. Their small size makes them a perfect lunch box fit.)

Grapes

Dehydrated fruit such as berries, cherries, etc. (A little goes a long way here, so you’ll only need a few.)

Veggies

Carrot sticks (Don’t buy baby carrots at the store; buy carrots in bulk and peel and cut them yourself.)

Celery (Serve plain or with hummus or a nut butter.)

Cucumbers

Grains

Tortilla chips. (These are an excellent frugal option, and they can be more filling than regular chips.)

Homemade granola bars. (Make them yourself and fill them will healthful ingredients like nut butters, oats, and dried fruit.)

Muffins. (Muffins can be a sugar trap, so focus on the healthier recipes that are naturally sweetened with fruits.)

Where to Buy Your Ingredients

We’ve found that the best place to buy lunch ingredients is at big warehouse clubs like Sam’s or Costco. For instance, at Costco, you can buy a 10 lb. bag of organic carrots for $5! Or, you can buy a big bag of potato chips for less than $4, which is much less than you’d pay at the grocery store. You just need to take the time to bag these items in individual portion sizes.

Save Time By Preparing Ahead

If you look at the suggestions above and think there’s no way you’d have time to prepare a lunch from scratch every day, especially if you have multiple kids, you’re probably right. Most of us don’t have that kind of time early in the morning.

Instead, prep all of the lunch ingredients for the week on the weekend. Have them all packed and ready to go in the pantry and the refrigerator so you or your kids just simply have to grab them and pack them in the early morning rush. Or, to be safe, prep on the weekend and prepare the lunches every night so you just need to grab them from the refrigerator in the morning.

Feeding your kids a brown bag lunch can be affordable. . .if you choose the right ingredients, and use these frugal sack lunch ideas.

How do you save money on your kids’ sack lunches?

]]>http://www.beatingbroke.com/frugal-sack-lunch-ideas-for-kids/feed/24 Simple Ways to Save: Medical Billshttp://www.beatingbroke.com/4-simple-ways-to-save-medical-bills/
http://www.beatingbroke.com/4-simple-ways-to-save-medical-bills/#respondFri, 13 Oct 2017 14:58:18 +0000http://www.beatingbroke.com/?p=17492Every year, the price of medical care seems to go up. We pay a hefty premium to be insured through my husband’s work, and then we have a $350 deductible and a $15 co-pay for any doctor’s visit, including wellness checks.

However, I know what we pay for medical care is not that much in the grand scheme of things; many Americans are paying much, much more for medical care than we are.

Yet, in my ongoing goal to continually lower our expenses, I’ve found a few strategies to reduce the high cost of medical care, and avoiding unpaid medical bills.

Cut those medical bills

Call the doctor before you go in.

One Saturday night, my youngest came down with a fever that started at 102.5 and climbed all the way to 104.5. Luckily, we controlled the fever with over the counter medicine, and she was back to herself in two days. And then it was time for my other daughter to get it. Then, my son. When my son got it, he was sick for three days and unable to keep down food.

Instead of bringing him to the doctor, I called the nurse. The nurse recommended a wait and see attitude. If he wasn’t better the next day, bring him in. Well, he was on the mend the next day, and I saved myself the $15 co pay.

Wait to fill prescriptions.

I had a root canal a few months ago. The doctor prescribed hydrocodone, and I promptly filled the prescription, which cost me $16 out of pocket. I should have waited, though, because the little pain I had afterward was easily managed with aspirin. If I hadn’t rushed to fill the prescription, I would have saved $16.

Of course, this advice does not apply to regular, monthly prescriptions need to control certain chronic conditions.

Consider an alternative to drug stores for your prescriptions.

I have to take thyroid medications. For years, I went to Walgreen’s to fill the prescription every month. Then I found out I could get a three month refill from Costco for a price 1/3 less than Walgreen’s. Yes, please.

If you have a Costco or Sam’s Club near you, checking the prices for prescriptions is worth your while. Even better, you don’t have to be a warehouse club member to use their pharmacy.

Ask for a different billing code.

My daughter had her regular wellness check in the spring when she turned 5. This past fall, we switched doctors. The new doctor required a new patient visit before she would start seeing my daughter regularly. The problem? The doctor’s office billed this visit as an annual wellness check, and my insurance provider refused to pay for any of the appointment, leaving me with a $125 bill.

I called the billing office, explained the situation, and after the billing office looked into the situation, they used a different billing code so I was only charged our typical $15 co-pay.

Insurance premiums, deductibles, and co-pays can be expensive. Using these tips and tricks, you can shave anywhere from a few dollars to several hundred or even thousand dollars off your medical bills each year.

What are your favorite ways to save on medical expenses?

]]>http://www.beatingbroke.com/4-simple-ways-to-save-medical-bills/feed/0Some Things to Consider when you Begin Online Tradinghttp://www.beatingbroke.com/things-consider-begin-online-trading/
http://www.beatingbroke.com/things-consider-begin-online-trading/#respondThu, 12 Oct 2017 00:52:40 +0000http://www.beatingbroke.com/?p=18385While online trading is a very enjoyable and generally accessible medium for accessing the market, there are some factors which you will need to get perfected before you can begin online trading and making proper strides in this world.

For example, getting the perfect online trading website, one such as Weiss Finance. This is the kind of trading platform which directly provides a lot of the components needed to make a success out of your online trading efforts.

Some things, however, can only be tied down by you, so let us make sure that you know exactly where to start when it comes to finalizing your first exciting venture into the market.

Finding the Perfect Broker to Begin Online Trading

You need to find the right trading style that matches your lifestyle, mindset, and overall skills and strengths – that is a given. But did you know that your broker also needs to match your trading style?

The kinds of online stock that you wish to trade heavily impacts which kind of broker you would ideally like to have on your side. You will indeed need a very sophisticated technological medium if you wish to enter the frantic day trading sector.

Day traders will indeed need the best brokers that they can find, as the speeds that activities happen in this sector of the market require lightning-fast access and reactions. There is much that you may potentially miss out on in the event that you do not have the proper facilities, and a lot of money you could potentially miss out on.

On the other hand, those that prefer to engage in short-term daily, weekly, and monthly trading styles can make the most out of the less advanced or sophisticated brokers available. As you can imagine, when it comes to fees, the brokers suited for day trading will be the most expensive, while the short-term brokers will be relatively more affordable.

Going for Trading Methods with Low-Risk and High-Reward

Everyone knows that trading stock is a risky business. A lot of people will seriously hurt their trading accounts prior to making any money and knowing what it means to even win once. These are the people that have failed to factor in risk management into their trading strategies.
A lot of people like to think of stock trading as some kind of glamorous and daring venture, in which a lot of money can be made if you just follow in the footsteps of whichever idol you happen to look up to.

The truth is that stock trading is mostly about how well you can manage your risk, and how much damage you can control. While there is indeed a lot of fun and thrilling activity to be had in the market, the best traders are those who have developed an almost sixth-sense like understanding of risk.

Making Sure that your Trading Method is Relevant to the Markets

While you may believe that you have a foolproof trading method nailed down, if it does not suit the market that you wish to enter, it could end up being useless – and not only unsuitable – but detrimental to your capital as well.

No matter which market you happen to go into – you always need to make sure that what you are bringing to the table will work with the environment. A lot of people are under the impression that a market can only keep going up.

The truth is that markets will often go down, and there can be long periods lasting months and even years where the market can stay down. The best way forwards then is to have a trading method that can make the most out of both up-markets and down-markets.

Trading the Most Beneficial Stocks

Making the most out of your stock selection is something that you will be able to pick up after a decent amount of time and experience. It takes a well trained eye to be able to pick up which stocks are the best, coupled with a lot of research.

Then there are the skills you will need, which again are only acquired after having spent a lot of time trading and immersed in the stock market.

]]>http://www.beatingbroke.com/things-consider-begin-online-trading/feed/0How to get More Financial Peace of Mindhttp://www.beatingbroke.com/get-financial-peace-of-mind/
http://www.beatingbroke.com/get-financial-peace-of-mind/#respondThu, 05 Oct 2017 01:33:30 +0000http://www.beatingbroke.com/?p=18382Money troubles kill relationships. They also cause major stresses, catalyze health problems, ruin plans, mess up sleep schedules, and so much more. We hate to admit it, but money is easy to worry about, and many of us do it a lot. What’s more, there is good reason to worry about money. Without enough of it, we can’t live where we want, eat what we want, get educated, have a fun time out of the house. Like it or not, your sense of well-being has much to do with how much money you have and how you use it. So here are a few ways to earn more peace of mind with your money.

Life Insurance

Perhaps the best way to get peace of mind in your financial life is to buy life insurance. If you’ve never thought about buying life insurance before, you probably don’t have much of a sense of how much it costs. Many people that life insurance quotes come in at a much lower price than they anticipated, especially for people who are young and healthy. Life insurance creates peace of mind not just for you, but for the people who depend on your for income and security.

Know Where Your Money Goes

If you’ve ever made a budget after a long period of not paying attention to your money, you know how much it hurts. It can seem like your spending record is judging you, and some people avoid this at all costs. But the only way to spend money more wisely is to take a close look at how you need to spend, and how you actually spend in practice. Often there is too much difference between these two criteria, and you should find a way to spend your money according to better measures and goals.

Get an Emergency Fund

Saving for an emergency fund is one of the most important financial habits you’ll ever get in. An emergency fund is meant to protect you in the event of an accident, a breakdown, and any number of unexpected expenses. It takes awhile to build an emergency fund enough to cover you and your family for 6 months (the oft-recommended amount), but once you’ve managed to do it, you’ll find it’s worth it. An emergency fund provides great peace of mind 1) because you know you’re taken care of, and 2) to make one you will have had to attain other important financial goals like debt elimination and saving habits.

There are many ways to live beneath your means and acquire better financial peace of mind. We lose our cool financially when our money is out of control. Learn the basic ropes of personal finance, spend time caring for your own financial garden, and you may be surprised at the extent to which it improves your life. People don’t feel secure when their means of sustenance and shelter are constantly in upheaval. When you have financial security, you are very likely to have physical security, which can only have a positive impact on your state of mind.

]]>http://www.beatingbroke.com/get-financial-peace-of-mind/feed/0When Your Frugal Life Can Cost You More Moneyhttp://www.beatingbroke.com/frugal-life-cost-you-more-money/
http://www.beatingbroke.com/frugal-life-cost-you-more-money/#commentsThu, 21 Sep 2017 01:56:41 +0000http://www.beatingbroke.com/?p=18369One of the tenets of a frugal life is learning impulse control.

Are you running errands and want to drink a soda? Just wait until you get home. Instead of paying $1.00 for a can, you can have one that you bought in bulk for .10 a can.

Are you excited to see the latest movie by your favorite actor? Don’t pay $10 or more per ticket; just wait until it comes to DVD and check it out from the library. Or watch it on Netflix or Amazon.

Often, when it comes to frugal living, simply waiting can save you money—a lot of money.

Your Frugal Life can Cost You Money

However, the same impulse that prompts frugal people to wait can also end up costing them a lot of money, if they’re not careful. The key is knowing when it’s good to wait vs. when you need to take action.

Car Repairs

When it comes to mechanical car repairs, waiting will almost always cost you money. For instance, a few years ago, I heard a squeak when I pushed on the brakes. However, we didn’t have the money for a costly repair, so we put off the repair while we tried to generate more money. While we waited, the brakes continued to deteriorate, so a repair that would have only cost a few hundred dollars had we taken care of it quickly, turned into a repair that cost several hundred more. Ouch. Lesson learned.

However, for non-mechanical repairs, waiting or just not fixing them can save you money. Our electronic sliding door on our minivan has been broken for a few years now. (The cable is frayed.) Repairing it would have cost $1,000+. Since the van has nearly 200,000 miles on it and is 13 years old, we opted not to make that repair.

Home Repairs

Some home repairs can be put off, but most of them, like car repairs, need to be attended to in a prompt manner. If they are, they will cost much less money. Case in point? We hated our kitchen faucet. It was very low, and it was hard to use when washing pots and pans. We wanted to replace it, but didn’t have the money. Well, this summer, we learned that the faucet had been leaking. There were actually three leaks dripping under the sink because the previous owner had duct taped (!) one of the pipes under the sink. The plumber replaced the faucet and changed the pipes under the sink. We would have had that expense regardless of when we replaced the faucet, but had we taken care of the faucet earlier, we would have saved ourselves the water damage repair underneath the sink.

Living a frugal life and waiting for most things in life can save you thousands, perhaps hundreds of thousands, of dollars over your lifetime, in some cases, waiting will just cost you more.

Do you tend to put off home and car repairs because of your frugal life, or do you attend to them promptly, knowing they will likely cost more money if you don’t?

‘I’m not a number, I’m a free man’ so goes the classic line of the iconic 1960s BBC television series The Prisoner. Yet, in many respects that’s not true. These days you are defined – at least financially – by a number and it’s your credit score (especially if it’s a poor credit score).

This figure – barely understood by most people outside of the world of finance – can have a massive impact on your life, maybe even without you knowing what it is.

It’s important not to dismiss this as just another bit of jargon (there’s plenty of it in the world of finance after all). If you need convincing, they why not consider the issues that you might face as a result of a poor credit score?

Access to money

The most obvious issue facing you if you have a poor credit score comes with your ability to be able to afford big ticket purchases. Whether it’s a house, a car, a holiday or an emergency repair – life has a bit of throwing up key purchases that cannot be paid for upfront.

We are now a nation of borrowers as a result – but our ability to borrow can be severely hampered by a bad credit score.

The ‘score’ itself refers to a calculation given by a credit scoring agency (there are three in the UK and three in the US). It’s effectively a measure of your borrowing ability and you’ll be marked down for missed payments or debts that you have been unable to pay off.

The number will determine whether a lender will give you money in the first place. They want assurance that you are likely to pay them back and this is the way in which they’ll get their assurance. It might also dictate how much you can borrow and the interest rate you will be charged.

So, put simply, a bad credit rating will mean that you can get less money, will be charged more for the privilege of borrowing that money or even that you are just turned down in the first place. That means that house, car, holiday or home repair could be an awful lot more of a problem for you.

Jobs

It isn’t all about the money that you borrow, however. Your score could also impact upon your ability to earn too. Employers are able to run a credit check on the people who apply to them for a job. This check is about ensuring the candidate has a sound record and can be trusted – but you could feel like this is a crude way to do this, as you might not have chance to offer any explanation by way of context.

Does one missed loan payment five years ago or a dispute with an old mobile phone contract deserve to define you in the eyes of employers? Whether you think this is fair or not, it might well be the case.

Emotional

Then, of course, there’s the emotional aspect to all of this. A bad credit score might hang over you. There are steps you can take to improve your credit rating, but this might well take time and mean that big life choices have to be put on hold for a while. Do you really want to be forced to delay moving into your first home with a partner for a few years while you sort out your credit rating?

During those years you might feel under a great deal of stress and strain and some people might well feel embarrassed about what they consider to be a ‘black mark’ against them. We might be a nation of borrowers, but we’re not a nation that is terribly good at talking about borrowing and money. Indeed, our personal finances are still seen as something of a taboo by many people and that can cause people to bottle up their concerns or bury their head in the sand when they encounter trouble.

A poor credit score can, therefore, stop you buying the things you need, harm your chances of getting a good job and impact upon your mental health. When you put it like that, the importance of a good credit score becomes pretty clear.